Member resource - British companies need shareholder approval for political donations. Ensure that your organisation is fully compliant with the requirements from the Companies Act 2006. - Company secretarial guidance notes and best practice guides.

British companies are required by law to obtain shareholder approval before making political donations or incurring political expenditure. The provisions for this were last updated by Part 14 of the Companies Act, 2006 (CA 2006). These most recent requirements for shareholder approval of donations and expenditure related to independent election candidates, came into force in 2008.

Although few companies make direct political donations, the CA 2006 provisions may catch types of expenditure that are less overtly political. This guidance explores what might be considered to fall within the broad definition of ‘political’ and explains why organisations might consider it prudent to seek shareholder approval for this kind of expenditure.

This guidance contains advice for governance professionals on:

  • Shareholder authority
  • Exception for donations of £5,000 or less
  • Definition of political donation
  • Definition of political expenditure
  • Enforcement against directors
  • Precautionary approach
  • Disclosure requirements
  • Shareholder voting policy.

Download the Political Donations guidance below.

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